Dairy industry could collapse in as little as six months

Dairy industry could collapse in as little as six months

NORTH Queensland's biggest dairy region has six to 18 months left before it becomes unviable without major change, as supermarket giants Coles and Woolworth's are called to deliver an explanation in Canberra next week.

Tablelands Regional Mayor Joe Paronella with Malanda Milk bottles containing messages on what needs to be done to save milk production in Queensland.

There is building pressure for action to save the industry, as more farmers are squeezed out by drought and low milk prices.

Tablelands Mayor Joe Paronella says there are just 44 dairy farms left in his region, down from 250, and warned there was a point of no return.

"I cannot emphasise enough how much our industry is in a crisis, especially in the far north Queensland," Cr Paronella said.

"We've got between six and 18 months to keep our farmers in business there. They need help urgently. They cannot keep going losing money on every litre of milk they produce."

Senator Susan McDonald has called for Coles, Woolworths and milk processors to appear before a public hearing in Canberra on Thursday to explain the criteria they use to pay Queensland farmers less for their milk than what it costs to produce.

"While farmers have been publicly suffering, the silence from Coles and Woolworths has been deafening," she said.

The dairy industry is in crisis and needs to be urgently fixed, Tablelands Mayor Joe Paronella said. Picture: Dannika Bonser

Woolworths had yet to receive the request late yesterday, but had met with the Senator earlier in the week to discuss her concerns.

A Woolworths spokesman said it was dairy processors, not the supermarket, which negotiated farmgate milk prices with farmers.

"We've been taking steps to support a more sustainable dairy industry while the Federal Government works to deliver the evidence-based structural reform the ACCC recommended following its 18-month inquiry," he said.

"Since September 2018, our drought levy has contributed an extra $29m in relief to more than 450 Australian dairy farmers."

LNP Senator Susan McDonald is calling for supermarket giants Coles and Woolworths to appear before a Senate committee next week. Picture: James Liveris

A Coles spokesman said they were paying dairy processors the highest wholesale prices for dairy products in several years.

"Coles continues to work towards making Australia's dairy industry more sustainable and is exploring long-term solutions with government and industry stakeholders," he said.

Northern Australia Minister Matt Canavan shied away from a government-mandated drought levy on milk, but would not rule it out.

"That's a second best option. It's not the first best outcome," he said.

The Government is arguing its dairy code of conduct, expected to be in place by January 1, will assist get farmers a fair price.